The CRC interim administrator’s report has called for the winding up of Friends & Supporters of the CRC (F&S), saying the “only rationale” for setting up this CRC-owned charity was to maximise HSE funding for CRC services.
The administrator cited “big ticket” F&S transactions for which there was little or no narrative in board minutes, including a €700,000 payment to CRC to finance its termination deal with former chief executive Paul Kiely.
The report also suggests F&S’s forgiveness of loans exceeding €5 million to The Care Trust, a lottery business it co-owns on an equal basis with Rehab, may have led to a breach of the Gaming and Lotteries Act.
F&S’s only function is to support CRC and it had accumulated funds of €12.8 million at the end of 2013, according to the report. “The HSE was not aware of the funds being accumulated and, technically, the CRC may not have been required to declare funds held by another company,” the report states.
“However, the only rationale for the establishment of F&S was to maximise the HSE funding of CRC services – the inference drawn being that if the HSE had been aware of the level of funds available, it would have reduced its annual allocation to the CRC.”
‘Easy access’
It states that the “availability of and easy access” to F&S funds may have coloured the CRC board’s decisions on pay and pensions.
The report shows that F&S’s €700,000 “donation” in respect of Mr Kiely’s severance package amounted to almost half of its annual income from Care Trust. This made the deal possible. “As in the case of other donations to the CRC, the minutes make no reference to the approval of donations to the CRC but they are shown in the annual accounts.”
F&S’s write-off of a €5.08 million Care Trust loan, matched by Rehab, brought F&S’s proportion of lottery proceeds below the legal limit.
Under the Act no more than 40 per cent of lottery proceeds can be used for expenses. Loan forgiveness meant the F&S’s ultimate proceeds from Care Trust were less than the 60 per cent required.
The administrator also cited a €3 million unsecured F&S loan to CRC in 2012 for pension liabilities. While the CRC board approved the transaction, there was no approval by the F&S board and no written agreement on loan terms.
F&S gave €550,000 in 2013 to CRC to repay funds it advanced to CRC Medical Devices, a loss-incurring subsidiary of F&S which is being wound up.
“The total of the liabilities of CRC Medical Devices is uncertain,” said the report. “In the final analysis, losses sustained by CRC Medical Devices will be a drain on F&S resources and on the funds raised for the benefit of the CRC.”
